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Permanent URI for this collectionhttps://hdl.handle.net/20.500.14288/6
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Publication Open Access Random assignment under weak preferences(Elsevier, 2009) Department of Economics; Yılmaz, Özgür; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 108638The natural preference domain for many practical settings of the assignment problems is the one in which agents are allowed to be indifferent between objects, the weak preference domain. Most of the existing work on assignment problems assumes strict preferences. There are important exceptions. but they provide solutions only to the assignment problems with a social endowment, where agents own objects collectively and there are no private endowments. We consider the general class of assignment problems with private endowments and a social endowment. Our main contribution is a recursive solution for the weak preference domain. Our solution satisfies individual rationality, ordinal efficiency and a recently introduced fairness axiom, no justified-envy.Publication Open Access The probabilistic serial mechanism with private endowments(Elsevier, 2010) Department of Economics; Yılmaz, Özgür; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 108638A random assignment is ordinally efficient if it is not stochastically dominated with respect to individual preferences over sure objects. When there are no private endowments, the set of ordinally efficient random assignments is characterized by the eating algorithm (Bogomolnaia and Moulin, 2001). When there are private endowments, the main requirement is individual rationality; however, the eating algorithm fails to deliver this property. Our contribution is the natural generalization of the eating algorithm for this general class of problems. The family of this generalized eating algorithm characterizes the set of individually rational and ordinally efficient random assignments. A special solution in this family, the individually rational probabilistic serial (PS(IR)), also achieves a new fairness axiom, no justified-envy. However, it is not immune to strategic manipulation. We show that individual rationality, no justified-envy and strategy-proofness are incompatible.Publication Open Access Majority choice of an income-targeted educational voucher(American Economic Association (AEA), 2018) Epple, Dennis; Romano, Richard; Department of Economics; Sarpça, Sinan; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 52406A model of majority choice of voucher characteristics with quantitative counterpart explains observed income eligibility requirements for educational vouchers. Households differ by income and preference for religious schooling. They elect a policy maker who chooses public school expenditure, a voucher, a maximum income for voucher eligibility, and a tax to finance public expenditure. Equilibrium has a voucher below per student public expenditure, an eligibility threshold near 300 percent of the poverty level, and a majority in public school though with substantial voucher usage, all properties typical of US voucher programs. Disallowing a voucher leads to higher per student public expenditure.Publication Open Access Choice, consideration sets, and attribute filters(American Economic Association (AEA), 2018) Department of Economics; Kimya, Mert; Faculty Member; Department of Economics; College of Administrative Sciences and EconomicsIt is well known that decision makers do not always consider all of the available alternatives when making a choice. When the alternatives have attributes, these attributes provide a natural way to form the consideration set. I assume a procedure in which the decision maker uses the relative ranking of the alternatives on each attribute to reduce the size of the choice set. I provide a characterization of the procedure and illustrate how to identify the underlying preference and consideration set. The model explains certain choice anomalies such as the attraction and the compromise effects.Publication Open Access Building social cohesion in ethnically mixed schools: an intervention on perspective taking(Oxford University Press (OUP), 2021) Alan, Şule; Baysan, Ceren; Kubilay, Elif; Department of Economics; Gümren, Mert; Researcher; Department of Economics; Graduate School of Social Sciences and HumanitiesWe evaluate the effect of an educational program that aims to build social cohesion in ethnically mixed schools by developing perspective-taking ability in children. The program is implemented in Turkish elementary schools affected by a large influx of Syrian refugee children. We measure a comprehensive set of outcomes that characterize a cohesive school environment, including peer violence incidents, the prevalence of interethnic social ties, and prosocial behavior. Using randomized variation in program implementation, we find that the program significantly lowers peer violence and victimization on school grounds. The program also reduces the likelihood of social exclusion and increases interethnic social ties in the classroom. We find that the program significantly improves prosocial behavior, measured by incentivized tasks: treated students exhibit significantly higher trust, reciprocity, and altruism toward each other as well as toward anonymous out-school peers. We show that this enhanced prosociality is welfare improving from the ex post payoff perspective. We investigate multiple channels that could explain the results, including ethnic bias, impulsivity, empathetic concern, emotional intelligence, behavioral norms, and perspective taking. Children's increased effort to take others' perspectives emerges as the most robust mechanism to explain our results.Publication Open Access Subcontracting with availability guarantees: production control and capacity decisions(Taylor _ Francis, 2004) Department of Economics; Department of Business Administration; Tan, Barış; Faculty Member; Department of Economics; Department of Business Administration; College of Administrative Sciences and Economics; 28600We present a simplified model of a system with a producer, a subcontractor and a random demand. The demand level alternates between a high level and a low level with exponential switching times. The producer does not have enough capacity to meet the high demand. Therefore, it either produces to stock in advance or uses a subcontractor to receive additional capacity when it needs. The subcontractor serves a number of manufacturers and guarantees a long-term availability that is defined as the long-term probability that the subcontractor will be available when it is requested, to each manufacturer. Therefore, a manufacturer may not receive the requested capacity from the subcontractor immediately and waits until the subcontractor becomes available. The times that the subcontractor is available and not available are also exponential random variables. The producer uses a threshold-type policy that depends on the state of the inventory/backlogto decide how much to produce and how much to request from the subcontractor. This system is modeled analytically based on a stochastic flow rate control problem with continuous flow and discrete states in a Markovian setting. A numerical analysis of the model is used to analyze the effects of guaranteed availability on the manufacturer’s and subcontractor’s performances. Extensions to the producer’s and subcontractor’s capacity decisions and the subcontractor’s pricing decisions are also discussed.Publication Open Access How (not) to integrate blood subtyping technology to kidney exchange(Elsevier, 2018) Department of Economics; Yılmaz, Özgür; Sönmez, Tayfun; Ünver, Utku; Faculty Member; Faculty Member; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 108638; N/A; N/AEven though kidney exchange became an important source of kidney transplants over the last decade with the introduction of market design techniques to organ transplantation, the shortage of kidneys for transplantation is greater than ever. Due to biological disadvantages, patient populations of blood types B/O are disproportionately hurt by this increasing shortage. The disadvantaged blood types are overrepresented among minorities in the US. In order to mitigate the disproportionate harm to these biologically disadvantaged groups, the UNOS reformed in 2014 the US deceased-donor kidney-allocation system, utilizing a technological advance in blood typing. The improved technology allows a certain fraction of blood type A kidneys, referred to as subtype A2 kidneys, to be transplanted to medically qualified patients of blood types B/O. The recent reform prioritizes subtype A2 deceased-donor kidneys for blood type B patients only. When restricted to the deceased-donor allocation system, this is merely a distributional reform with no adverse impact on the overall welfare of the patient population. In this paper we show that the current implementation of the reform has an unintended consequence, and it de facto extends the preferential allocation to kidney exchange as well. Ironically this "spillover" not only reduces the number of living-donor transplants for the overall patient population, but also for the biologically disadvantaged groups who are the intended beneficiaries of the reform. We show that minor variations of the current policy do not suffer from this unintended consequence, and we make two easy-to-implement, welfare-increasing policy recommendations.Publication Open Access Transition of international science, technology, engineering, and mathematics students to the U.S. labor market: the role of visa policy(Wiley, 2019) Department of Economics; Demirci, Murat; Faculty Member; Department of Economics; College of Administrative Sciences and EconomicsI analyze how visa policies affect international students' transition to the U.S. labor market. The Optional Practical Training (OPT) program permits international students to work via a student visa for a limited period after graduation before obtaining a work visa—an uncertain process due to the binding visa cap. I find that the extension in the length of OPT terms for students in science, technology, engineering, and mathematics (STEM) increases their likelihood of initially staying in the United States and using OPT. This result suggests that uncertainties about obtaining work visas hinder international STEM students' participation in the U.S. labor market. (JEL J61, K37, I23).Publication Open Access Inflation as a global phenomenon - Some implications for inflation modelling and forecasting: Model derivations and additional results(2017) Martinez-Garcia, Enrique; Department of Economics; Kabukçuoğlu, Ayşe; Faculty Member; Department of Economics; College of Administrative Sciences and EconomicsWe model local inflation dynamics using global inflation and domestic slack motivated by a novel interpretation of the implications of the workhorse open-economy New Keynesian model. We evaluate the performance of inflation forecasts based on the theoretically-consistent single-equation forecasting speci cation implied by the model, exploiting the international linkages of inflation. In this on-line appendix, we provide a detailed description of the structure of the model underlying our analysis from first principles. Furthermore, we characterize the solution of the log-linearized model and derive analytically the key equilibrium relationships that we use for forecasting. We make note in particular of the role that the slope of the Phillips curve plays in the equilibrium solution of the model and for forecasting purposes. We also include additional results (robustness checks) that support and complement our in-sample analysis of the fit of the model and our pseudo out-of-sample forecasting evaluation exercises.Publication Open Access Markov chain test for time dependence and homogeneity: an analytical and empirical evaluation(Elsevier, 2002) Department of Business Administration; Department of Economics; Tan, Barış; Yılmaz, Kamil; Faculty Member; Faculty Member; Department of Business Administration; Department of Economics; College of Administrative Sciences and Economics; 28600; 6111This paper evaluates the small and large sample properties of Markov chain time-dependence and time-homogeneity tests. First, we present the Markov chain methodology to investigate various statistical properties of time series. Considering an auto-regressive time series and its associated Markov chain representation, we derive analytical measures of the statistical power of the Markov chain time-dependence and time-homogeneity tests. We later use Monte Carlo simulations to examine the small-sample properties of these tests. It is found that although Markov chain time-dependence test has desirable size and power properties, time-homogeneity test does not perform well in statistical size and power calculations.